(REIT) Financial Report for the Fiscal Period Ended February 2020
REIT Securities Issuer:
TSE Code:
Representative:

SANKEI REAL ESTATE Inc.
2972
Yuichi Ota, Executive Director

Listing:
URL:

Asset Management Company:
Representative:
Contact:

Sankei Building Asset Management Co., Ltd.
Yuichi Ota, President and Chief Executive Officer
Atsushi Mukai, Director and Chief Finance & IR Officer
TEL: +81-3-5542-1316

April 16, 2020
Tokyo Stock Exchange
https://www.s-reit.co.jp/en/

Scheduled date of submission of semiannual securities report:
Scheduled date of commencement of distribution payment:

May 27, 2020
May 26, 2020

Preparation of supplementary financial results briefing materials:
Holding of financial results briefing session:

Yes
Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for the Fiscal Period Ended February 2020 (from September 1, 2019 to February 29, 2020)(1) Results of Operations(% figures are the rate of period-on-period increase (decrease))
Operating revenue
million yen%
Fiscal period
ended Feb. 2020
ended Aug. 2019

Ordinary profit
million yen%

Net profit
million yen

%

1,933

67.1

1,166

66.6

1,069

217.9

1,068

218.9

1,157

-

699

-

336

-

335

-

yen

%

Ratio of ordinary profit tototal assets%

Ratio of ordinary profit tooperating revenue
%

3,007

3.5

1.7

55.3

2,312

1.5

0.7

29.1

Earnings per unit
Fiscal period
ended Feb. 2020
ended Aug. 2019

Operating profit
million yen%

Return on equity(Note 1) At SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), the accounting period of the fiscal period ended August 2019 is a period of 286 days
from November 19, 2018 to August 31, 2019, but the number of days of the actual asset management period is a period of 173 days from March 12,2019.
(Note 2) Earnings per unit is calculated by dividing net profit by the daily weighted average number of investment units (Fiscal period ended August 2019: 144,970
units, Fiscal period ended February 2020: 355,420 units). In addition, for the fiscal period ended August 2019, earnings per unit when calculated basedon the daily weighted average number of investment units with the date of commencement of actual management (March 12, 2019), deemed as the
beginning of the fiscal period (237,695 units) is 1,410 yen.
(Note 3) Return on equity and ratio of ordinary profit to total assets for the fiscal period ended August 2019 are calculated by using the average of equity andaverage of total assets as of the date of commencement of the actual asset management period (March 12, 2019), and as of August 31, 2019.
(Note 4) Percentage figures for operating revenue, operating profit, ordinary profit and net profit are the rate of period-on-period increase (decrease) but are
not applicable for the fiscal period ended August 2019 because it is the 1st fiscal period.

(2) Distribution
Distribution per unit
Total distribution
Distributions in excess(excluding distribution (excluding distributionof earnings per unit
in excess of earnings) in excess of earnings)
yenmillion yen
yen

Total distribution inexcess of earnings

Payout ratio

Ratio of distribution
to net assets

million yen%%
Fiscal period
2,995
1,068
100.0
2.9
ended Feb. 2020
ended Aug. 2019
1,399
335
100.0
1.5
(Note 1) Due to issuance of new investment units during the fiscal period resulting in change in the number of investment units during the fiscal period, payout
ratio is calculated by the following formula and rounded to one decimal place
Payout ratio = Total distribution (excluding distribution in excess of earnings) ÷ Net profit × 100(Note 2) Ratio of distribution to net assets for the fiscal period ended August 2019 is calculated based on the weighted average of net assets per unit with thedate of commencement of the actual asset management period (March 12, 2019), deemed as the beginning of the fiscal period.

(3) Financial Position

Fiscal period
ended Feb. 2020
ended Aug. 2019

Total assets
million yen

Net assets
million yen

76,186
48,718Equity ratio%

Net assets per unit
yen

37,60949.4

105,408

23,46048.2

97,913

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(4) Cash Flows

million yen

million yen

million yen

Cash and cash
equivalents at end of
periodmillion yen

2,123(23,388)

24,711

6,877

201(42,109)45,3393,430

Cash flows fromoperating activities
Fiscal period
ended Feb. 2020
ended Aug. 2019

Cash flows frominvesting activities

Cash flows fromfinancing activities

2. Operating Forecasts for the Fiscal Period Ending August 2020 (from March 1, 2020 to August 31, 2020) andOperating Forecasts for the Fiscal Period Ending February 2021 (from September 1, 2020 to February 28, 2021)(% figures are the rate of period-on-period increase (decrease))

Operating revenue
million yen
Fiscal period
ending Aug. 2020
ending Feb. 2021

Operating profit% million yen

Ordinary profit% million yen

Net profit% million yen

Distribution per unit
Distributions in excess(excluding distributionof earnings per unit
in excess of earnings)
%
yen
yen

1,999

3.4

923

(20.8)

830(22.4)

829(22.4)

2,324

-

2,045

2.3

945

2.4

862

3.9

861

3.9

2,415

-

(Reference) Forecast earnings per unit (Forecast net profit ÷ Forecast total number of investment units issued and outstanding at endof period)
Fiscal period ending August 2020: 2,324 yen Fiscal period ending February 2021: 2,414 yen(Note)

Distribution per unit (excluding distribution in excess of earnings) is calculated based on the forecast total number of investment units issued andoutstanding as of the date of this document of 356,800 units.

* Other(1) Changes in accounting policies, changes in accounting estimates, and retrospective restatements
i. Changes in accounting policies accompanying amendments to accounting standards, etc.: None
ii. Changes in accounting policies other than i:Noneiii. Changes in accounting estimates:
None
iv. Retrospective restatements:
None(2) Total number of investment units issued and outstandingi.
Total number of investment units
issued and outstanding (including
Fiscal period
Fiscal period
356,800 units
239,600 units
treasury investment units) at end of ended Feb. 2020
ended Aug. 2019
periodii. Number of treasury investment units at
Fiscal period
Fiscal period
0 units
0 units
end of period
ended Feb. 2020
ended Aug. 2019
(Note) For the number of investment units serving as the basis for calculation of earnings per unit, please refer to “Notes on Per
Unit Information” on page 23.

* Financial reports are exempt from audits by certified public accountants or audit corporations.
* Matters of special note
The operating forecasts and other forward-looking statements contained in this document are based on information currently
available to and certain assumptions deemed reasonable by SANKEI REAL ESTATE. Accordingly, the actual results of operations, etc.
may differ materially due to various factors. In addition, the forecasts are not a guarantee of the amount of distributions. For theassumptions underlying the operating forecasts, matters of note in the use of the operating forecasts, etc., please refer to“Assumptions Underlying the Operating Forecasts for the Fiscal Period Ending August 2020 (from March 1, 2020 to August 31, 2020)and Fiscal Period Ending February 2021 (from September 1, 2020 to February 28, 2021)” on page 5.

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
Table of Contents
1. Management Status ...................................................................................................................................................................... 2(1) Management Status ............................................................................................................................................................... 2(2) Investment Risks .................................................................................................................................................................... 6
2. Financial Statements ..................................................................................................................................................................... 9(1) Balance Sheet ........................................................................................................................................................................ 9(2) Statement of Income ........................................................................................................................................................... 11(3) Statement of Unitholders’ Equity ........................................................................................................................................ 12(4) Statement of Cash Distribution ............................................................................................................................................ 13(5) Statement of Cash Flows...................................................................................................................................................... 14(6) Notes on the Going Concern Assumption ............................................................................................................................ 15(7) Notes on Matters Concerning Significant Accounting Policies ............................................................................................. 15(8) Notes to the Financial Statements ....................................................................................................................................... 16(9) Changes in Total Number of Investment Units Issued and Outstanding .............................................................................. 23
3. Reference Information ................................................................................................................................................................ 24(1) Information on Price of Assets under Management, Etc. .................................................................................................... 24(2) Capital Expenditures ............................................................................................................................................................ 29-1-

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020

1. Management Status(1) Management Status(Overview of the Fiscal Period under Review)i. Brief History of the Investment Corporation
SANKEI REAL ESTATE was incorporated under the Act on Investment Trusts and Investment Corporations (Act No. 198 of1951, as amended; hereinafter, the “Investment Trusts Act”) with Sankei Building Asset Management Co., Ltd. (hereinafter,
the “Asset Management Company”) as the organizer and investments in capital of 100 million yen (1,000 units) on
November 19, 2018, and completed the registration with the Kanto Local Finance Bureau pursuant to Article 187 of theInvestment Trusts Act on December 17, 2018 (Registration No. 140 with the Director-General of the Kanto Local Finance
Bureau). Later, SANKEI REAL ESTATE listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange,
Inc. (hereinafter, “Tokyo Stock Exchange”) on March 12, 2019 (TSE code: 2972).
During the fiscal period under review, SANKEI REAL ESTATE implemented, for the first time since its listing, an issuance of
new investment units through public offering (111,619 units) with September 2, 2019, as the payment due date, and an
issuance of new investment units through third-party allotment (5,581 units) with September 26, 2019, as the payment
due date. As a result, as of the last day of the fiscal period under review (February 29, 2020), total number of investment
units issued and outstanding was 356,800 units.
ii.

Management Environment
In the fiscal period under review (fiscal period ended February 2020), the Japanese economy continued to show weakness
in exports and increasing weakness mainly in the manufacturing sector, and while the employment situation and income
environment continued to improve, reactionary decline in last-minute demand before the consumption tax hike was also
seen in personal consumption. As to overseas economies, while trade issues between the U.S. and China have progressed,
uncertain factors still remain, such as the post-Brexit development and future of the Chinese economy, requiring attention
to the economic trends. Furthermore, the impact of the novel coronavirus outbreak has continued to spread across theglobe from January this year to the end of the fiscal period under review, also requiring attention to its impact on theeconomies and the financial and capital markets in Japan and abroad.
Under such economic circumstances, in terms of the office building market, which SANKEI REAL ESTATE sets as the primary
investment target, the continued demand in line with strong corporate performance resulted in the continuous increase
in rent and low vacancy rate in Tokyo and Osaka, where SANKEI REAL ESTATE’s portfolio assets are located. As to the hotel
market, in which SANKEI REAL ESTATE invests as sub assets, the number of international visitors to Japan remained almost
unchanged until January this year, mostly maintaining the level of the previous year. However, with the spread of the novel
coronavirus, more people started to refrain from taking overseas trips in February, causing the number of international
visitors to Japan to drop significantly. Although the two hotel properties held by SANKEI REAL ESTATE have started to seesome impact on the occupancy rate, fixed rent based on the current contract has been secured in the fiscal period underreview.

iii.

Management Performance
SANKEI REAL ESTATE procured 12,777 million yen through the first public offering since its listing and acquired four
properties (of which, one is an additional acquisition) on September 3, 2019, for a total acquisition price (Note 1) of 23,930
million yen using the proceeds from the public offering and borrowings. As a result, the portfolio of SANKEI REAL ESTATE
as of the end of the fiscal period under review had 11 properties with the asset size (total acquisition price) of 67,325
million yen.
Furthermore, as of the last day of the fiscal period under review, the occupancy rate (Note 2) of the 11 properties in theportfolio remained stable at 100.0%. Although the two hotel properties held by SANKEI REAL ESTATE have started to seesome impact of the spread of the novel coronavirus (COVID-19) from February, fixed rent based on the current contract
has been secured.
(Note 1) “Acquisition price” is the sale and purchase price of each real estate and trust beneficiary right stated in the sale and purchaseagreement for each acquired asset, rounded down to the nearest million yen. The sale and purchase prices do not include consumption
tax, local consumption tax and the various expenses required for the acquisition. The same shall apply hereinafter.
(Note 2) “Occupancy rate” is the ratio of total leased area to total leasable area, rounded to one decimal place. Moreover, for total leasable area
and total leased area, each total is calculated based on the area corresponding to SANKEI REAL ESTATE’s ownership interest in eachportfolio property.

iv.

Overview of Fund Procurement(Equity Financing)In the fiscal period under review, SANKEI REAL ESTATE implemented for the first time since its listing an issuance of new
investment units through public offering (111,619 units) with September 2, 2019, as the payment due date and procured
12,777 million yen. Furthermore, SANKEI REAL ESTATE implemented an issuance of new investment units through thirdparty allotment (5,581 units) with September 26, 2019, as the payment due date and procured 638 million yen. As a result,
SANKEI REAL ESTATE has unitholders’ capital of 36,540 million yen as of the last day of the fiscal period under review.
(Debt Financing)In the fiscal period under review, 12,856 million yen was borrowed from Mizuho Bank, Ltd., Sumitomo Mitsui Banking
Corporation, Development Bank of Japan Inc., Mizuho Trust & Banking Co., Ltd., Sumitomo Mitsui Trust Bank, Limited,
Shinsei Bank, Limited and Resona Bank, Limited. through a loan syndicate with Mizuho Bank, Ltd. and Sumitomo Mitsui
Banking Corporation as the arrangers on September 3, 2019, in conjunction with the acquisition of properties.

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SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
In addition, early repayment of 600 million yen was made on October 7, 2019, using the proceeds from the issuance of
new investment units through third-party allotment; and early repayment of 613 million yen was made on December 23,
2019, using the refund of consumption tax for the properties acquired on March 12, 2019. As a result, as of the last day of
the fiscal period under review, the balance of borrowings outstanding was 33,956 million yen and the ratio of interestbearing liabilities to total assets (hereinafter, “LTV ratio”) was 44.6%.
v.

Overview of Business Performance and Distribution
As a result of the management described above, business performance in the fiscal period under review was operating
revenue of 1,933 million yen, operating profit of 1,166 million yen, ordinary profit of 1,069 million yen and net profit of
1,068 million yen. Concerning distribution, in accordance with SANKEI REAL ESTATE’s distribution policy (Article 36 of thearticles of incorporation), SANKEI REAL ESTATE intends to have the maximum amount of distribution of earnings included
in deductible expenses by application of special provisions for taxation on investment corporations (Article 67-15 of the
Act on Special Measures Concerning Taxation (Act No. 26 of 1957, as amended)). For the fiscal period under review, thedecision was made to distribute 1,068,616,000 yen, which is the entire amount of unappropriated retained earnings,
excluding fractions of distribution per unit of less than 1 yen. This resulted in distribution per unit of 2,995 yen.

(Outlook for the Next Fiscal Period)i.
General Management Outlook
The Japanese Government has declared a state of emergency based on the Act on Special Measures for Pandemic Influenza
and New Infectious Diseases Preparedness and Response on April 7, 2020 (Act No. 31 of 2012, as amended; hereinafter,
the “Act on Special Measures for Pandemic Influenza and New Infectious Diseases Preparedness and Response”), andrequested seven prefectures to take various measures including self-restraint of going out from the same day to May 6.
Based on this declaration, various effects have been seen including the closure and shortened operating hours of somebusinesses as well as acceleration of telework, etc. Evaluations indicating that these effects will be further expanded or
prolonged were also shown.
In addition, according to the Monthly Economic Report (March 2020) by the Cabinet Office, the Japanese economy isexpected to continue to be in a difficult situation impacted by the novel coronavirus outbreak. Careful attention to therisks of the outbreak causing further slowdown of economies both home and abroad as well as to its impact such as
fluctuations of the financial and capital markets will be required. Overseas economic activities have also been curbed dueto the novel coronavirus pandemic and its impact is expected to continue. There is increasing uncertainty over themeasures and responses in accordance with the declaration of state of emergency based on the Act on Special Measuresfor Pandemic Influenza and New Infectious Diseases Preparedness and Response, the effects of fluctuation in the financial
and capital markets, and trends in crude oil price, and it is necessary to pay close attention to them.
In the office building market, vacancy rates have remained low until now and rents have continued to rise. Since SANKEIREAL ESTATE mainly holds office buildings in large cities such as the Tokyo metropolitan area and Osaka City, there is still
demand for office bases from tenants. Furthermore, since the contract term and rent are stipulated in the lease agreement,
it is believed that the likelihood of being immediately affected by the novel coronavirus is low at this point in time. However,
SANKEI REAL ESTATE is receiving requests for rent reduction and respite on rent payment from some tenants due to thenovel coronavirus, and there is a possibility that the impact on the office building market will further increase such as being
forced to respond to such requests and the departure of tenants.
In terms of the hotel market, demand for hotel rooms is expected to continue facing difficulty due to the postponementof the Tokyo Olympic Games in addition to the impact of the novel coronavirus. Revenue from fixed rents has been secured
for the two properties held by SANKEI REAL ESTATE and SANKEI REAL ESTATE intends to continue paying close attention tothe operation status.
(A) External Growth Strategy
SANKEI REAL ESTATE has received sponsor support from Sankei Building Co., Ltd. (hereinafter "Sankei Building" or"Sponsor"), while carefully assessing the economic effects of the spread of the novel coronavirus and the real estate
investment market conditions, and plans to seek opportunities for external growth by acquiring Sankei Building’s portfolio
as well as properties held by third parties utilizing Sankei Building’s sourcing capabilities.
(B) Internal growth strategy
As a rule, SANKEI REAL ESTATE aims for steady internal growth through Sankei Building’s sponsorship support.
The Sankei Building Group firstly boasts the functions of planning and development of properties of a wide range of asset
types not only meeting its own holding and leasing needs but also capturing various real estate investor needs, additionallyboasts the functions to attract tenants and customers by utilizing its vast and strong network, and also
boasts a diverse array of operation and management functions, such as property management, building management,
construction management and building maintenance for real estate under its management.
SANKEI REAL ESTATE will utilize the Sankei Building Group’s comprehensive operation and management functions ranging
from real estate planning and development to lease-up, operation and management through collaboration within the
Sankei Building Group with Sankei Building at the core.
In addition, SANKEI REAL ESTATE will execute the following measures, etc. to aim for greater revenue and stable growthof earnings from management of assets under management.
(a) Strive to provide services for tenants’ comfortable use while strengthening and enhancing tenant relationships inorder to maintain and improve tenant satisfaction so as to maintain and improve the occupancy rate and rent ofassets under management.

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SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020(b) SANKEI REL ESTATE seeks to maintain and improve the market competitiveness of assets under management throughplanning and implementation of repairs and capital expenditures by taking into consideration the state andcharacteristics of assets under management, real estate market conditions, tenant needs and other factors andexamining them more carefully than usual.
(c) Strive to maintain and improve earnings by conducting agile leasing activities with a continual grasp of leasing market
trends.
(d) Adopt ongoing initiatives to reduce operating and management costs and consider for the environment by
periodically verifying the validity of operations, management level and costs of assets under management. In doing
so, the balance with the market competitiveness of assets under management and perspective from maintaining andimproving tenant satisfaction are taken into consideration.
(C) Financial Strategy
SANKEI REAL ESTATE will conduct appropriate and sound financial management while considering agility of financing
activities, stability of cash flows and other matters in order to secure stable earnings and steady growth of assets undermanagement over the medium to long term.
(a) Equity Financing
Issuance of new investment units shall be in an agile manner with due consideration to investment unit dilution, while
also taking into account the capital market trends, financial environment, timing of acquisition of the real estate, etc.
to be newly acquired, ratio of interest-bearing liabilities to total assets and other factors in a comprehensive manner.
(b) Debt Financing
Upon borrowing, etc., fund procurement shall be executed in an appropriate manner by comprehensively taking into
account the balance between interest rate trends, market levels, financial agility, long-term business relationship andsecurity, and by considering the borrowing period, fixed or floating interest rate, provision of collateral or not, fees,and other terms and conditions of procurement of interest-bearing liabilities.
In addition, to secure financial soundness, the basic policy shall be to set the upper limit for the LTV ratio at 60% in principle(however, the LTV ratio may temporarily exceed the range of the upper limit for the LTV ratio for the purpose of new asset
acquisition, etc.). As a rule, SANKEI REAL ESTATE will maintain an approximate range of 40% to 50% during normal
operations.
ii.

Significant Subsequent Events
Not applicable.

iii. Operating Forecasts
SANKEI REAL ESTATE’s operating forecasts for the fiscal period ending August 2020 (from March 1, 2020 to August 31,
2020) and fiscal period ending February 2021 (from September 1, 2020 to February 28, 2021) are as follows:

Fiscal period
ending Aug. 2020
ending Feb. 2021

Net profit

Distribution per unit
(excluding
distributions inexcess of earnings)

Distributions inexcess of
earnings per
unit

million yen

million yen

yen

yen

923

830

829

2,324

-

945

862

861

2,415

-

Operatingrevenue

OperatingprofitOrdinary
profitmillion yen

million yen

1,999
2,045

Furthermore, for the assumptions underlying the operating forecasts, please refer to “Assumptions Underlying the
Operating Forecasts for the Fiscal Period Ending August 2020 (from March 1, 2020 to August 31, 2020) and Fiscal PeriodEnding February 2021 (from September 1, 2020 to February 28, 2021)” presented below.
(Note)

The forecast figures above are the current forecasts calculated under certain assumptions. Accordingly, the actual operating revenue,
operating profit, ordinary profit, net profit, distribution per unit and distribution in excess of earnings per unit may vary due to changes
in the circumstances. In addition, the forecasts are not a guarantee of the amount of distribution.

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SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
Assumptions Underlying the Operating Forecasts for the Fiscal Period Ending August 2020 (from March 1, 2020 to August 31, 2020)and Fiscal Period Ending February 2021 (from September 1, 2020 to February 28, 2021)
Item
Assumptions
・Fiscal period ending August 2020 (3rd fiscal period) (from March 1, 2020 to August 31, 2020)(184 days)
Accounting period・Fiscal period ending February 2021 (4th fiscal period) (from September 1, 2020 to February 28, 2021)(181 days)
・The assumption is that the real estate and real estate trust beneficiary rights (total of 11 properties)
held by SANKEI REAL ESTATE as of the date of this document (hereinafter, the “current portfolio
Assets underassets”) will continue to be held and that there will be no acquisition of new properties through to the
management
end of the fiscal period ending February 2021.
・In actual practice, change may arise due to acquisition of new properties, disposition of portfolio
properties, etc.
・Leasing business revenue of the current portfolio assets is calculated by taking into account various
factors, such as lease agreements that have been concluded and are valid as of the date of thisdocument, tenant trends and market trends.
・Note that the calculations take into account increase in leasing business revenue due to the end of therent-free period for some tenants, among other factors.
Operating revenue
・The assumption is that there will be no delinquent or unpaid rent by tenants.
・Assuming that the effects of the spread of the novel coronavirus will continue until the end of
December 2020, operating revenue is calculated by taking into account the decrease in revenue dueto the requests for rent reduction from tenants and the respite of rent payment for retail stores anddecrease in revenue due to decline in occupancy rates for rental conference rooms.
・Of operating expenses, the main components are as follows(Unit: million yen)
Fiscal period ending Fiscal period ending
Aug. 31, 2020Feb. 2021
Expenses related to leasing business [Total]
828
850

Operating expenses

Non-operating expenses

Interest-bearing
liabilities

Outsourcing expenses

186

185

Utilities expenses

136

135

Repair expenses
Property taxes

45
220

65
220

Depreciation

220

224

247

249

179

177

Other than expenses related to leasing business[Total]Asset management fee

・Of expenses related to leasing business, which are the main operating expenses, the expenses otherthan depreciation are calculated on the basis of historical data and by taking into consideration thefactors causing fluctuation in each of the expenses.
・Depreciation is calculated using the straight-line method.
・In general, fixed asset tax, city planning tax, etc. are calculated on a pro rata basis and reimbursed at
the time of property acquisition with the previous owner upon transactions of real estate, etc. At
SANKEI REAL ESTATE, the amount equivalent to the reimbursement is included in the cost of
acquisition and thus not expensed in the business period in which the property acquisition date falls
in the case of the properties for which such reimbursement is made at the time of transaction.
Furthermore, fiscal 2020 fixed asset tax, city planning tax, etc. will be expensed starting from the fiscal
period ending August 2021.
・Repair expenses for buildings is the amount estimated based on medium- to long-term repair plans
formulated by the asset management company. However, repair expenses possibly increasing inamount or additionally arising from unforeseeable factors may result in repair expenses differing
materially from the forecast amount.
・As interest expenses and other borrowing-related expenses, 93 million yen is assumed for the fiscal
period ending August 2020 and 82 million yen for the fiscal period ending February 2021.
・The assumption is that total interest-bearing liabilities will be 33,500 million yen at the end of the
fiscal period ending August 2020 and 33,500 million yen at the end of the fiscal period ending February
2021.
・The assumption is that (i) With refund of consumption taxes corresponding to the fiscal period ended
February 2020 scheduled to take place during the fiscal period ending August 2020, the concerned
refund, etc. will be used as the source of funds to repay a portion (456 million yen) of existing
borrowings during the fiscal period ending August 2020, and (ii) There will be no change in the balanceof borrowings other than the above through to the end of the fiscal period ending February 2021.
・LTV ratio is expected to be 45.0% at the end of the fiscal period ending August 2020 and 44.9% at theend of the fiscal period ending February 2021. LTV ratio is calculated by the following formula androunded to one decimal place.
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SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
Item

Number of investment
units issued andoutstanding

Distribution per unit
(excluding distributions
in excess of earnings)
Distributions in excessof earnings per unit

Other

Assumptions
LTV ratio = Total interest-bearing liabilities ÷ Total assets × 100
・The assumption is that the total number of investment units issued and outstanding as of the date ofthis document is 356,800 units and that there will be no change in the number of investment units
due to issuance of new investment units, etc. through to the end of the fiscal period ending February
2021.
・Distribution per unit (excluding distribution in excess of earnings) is calculated based on the forecast
total number of investment units issued and outstanding at the end of the fiscal period ending August2020 and fiscal period ending February 2021 of 356,800 units.
・ Distribution per unit (excluding distributions in excess of earnings) is calculated based on theassumption that distribution of earnings will be in accordance with the policy on distribution of cash
provided in SANKEI REAL ESTATE’s articles of incorporation.
・Distribution per unit (excluding distribution in excess of earnings) may vary due to various factors, suchas fluctuation in leasing business revenue accompanying change in assets under management, change
in tenants or other event, or incurrence of unexpected repairs.
・No cash distribution in excess of earnings is planned to be made at this point in time.
・The assumption is that the negative impact of the spread of the novel coronavirus infection will notfurther increase.
・The assumption is that there will be no amendment of laws and regulations, tax systems, accounting
standards, listing regulations provided by Tokyo Stock Exchange, Inc., rules provided by The Investment
Trusts Association, Japan, etc. that will impact the forecast figures above.
・The assumption is that there will be no unforeseen material change in general economic trends, realestate market conditions, etc.

(2) Investment Risks
The significant changes in “Investment Risks” in the securities registration statement (submitted on November 27, 2019, as
amended) are as follows. The number of each item corresponds to each item in the securities report. The amended parts areunderlined.
i. Risks related to investment units and investment corporation bonds issued by investment corporations(b)
Risks related to the fluctuation of market priceThe recent worldwide spread of the novel coronavirus infection has caused business stagnation and adverse effects
on economic activities. Continued stagnation of economic activities could adversely affect the business performanceof SANKEI REAL ESTATE over the medium to long term. From the end of the 2nd fiscal period (the calculation period
up to February 29, 2020) to the date of this document, the entire market share price has been adversely affected toa significant extent based not only on the Japanese economy but also the global situation, and investment units are
no exception. With concerns over the spread of infection going forward and the prolonged effects of such spread,
there is a risk that the entire market will be adversely affected. In addition to the above, adverse effects caused bysocial circumstances such as war and terrorism may occur. As a result, the market price of the investment unit may
be adversely affected and decline.
In addition, in cases in which measures and responses in accordance with the declaration of state of emergency basedon the Act on Special Measures for Pandemic Influenza and New Infectious Diseases Preparedness and Response
becomes necessary or the epidemic of infectious diseases is prolonged and the officers and employees of the AssetManagement Company are not able to come to the office and are forced to work from home (working on the
teleworking system) as a result of infection among the officers and employees, there is no guarantee that businessefficiency will be maintained since there are some tasks that are not suitable for the teleworking system. As a result,
there is a possibility that operations at the Asset Management Company will become stagnant and asset management
at SANKEI REAL ESTATE will be adversely affected.
In addition to the above, unlike deposits at financial institutions, investment units and the investment corporation
bonds are not covered by deposit insurance, etc., and recovery of the initial investment amount is not guaranteed forinvestment units. The market price of investment units fluctuates due to various factors. For example, it may fluctuate
by financial conditions (Note 1), real estate market conditions (Note 2), additional issuance of new investment units
by SANKEI REAL ESTATE (Note 3), and other various factors surrounding the market (Note 4).
(Note 1) The market price of investment units may be adversely affected by changes in the financial environment such as interest rate
trends and foreign exchange rates, trading volume and supply-demand balance of investment units, superiority and inferiority
in the comparison with investments in financial instruments other than real estate investment trust securities, fluctuation in thefinancial instruments market other than the real estate investment trust securities market and financial conditions such as themarket environment and future economic trends, and may fluctuate significantly in some cases. In particular, if investment units
are sold temporarily in large quantities on an exchange, the market price of may drop significantly.
(Note 2) The market price of investment units may be adversely affected by fluctuation in the valuation of general real estate, trend of
the real estate market, real estate supply-demand relationship, economic environment surrounding companies that may affectreal estate demand, change in various systems regarding laws and regulations, accounting and tax, and factors surrounding thereal estate-related market.
(Note 3) SANKEI REAL ESTATE raises funds as necessary to carry out its business, but if financing is carried out through issuance of new
investment units or allocating new investment unit subscription rights at no cost and when distribution per unit decreases or
net assets are diluted, the market price of investment units may be adversely affected. Also, even if investment units are
additionally issued during the period, the same amount of cash as existing investment units will be distributed regardless of theholding period of the investment units during that period. Therefore, this could affect the amount of distribution for existing
investment units, and there is a risk that market prices may decline due to such possibility.

-6-

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(Note 4) For example, the market price of investment units may decline also when SANKEI REAL ESTATE or the Asset Management
Company is subject to administrative guidance, recommendations on administrative sanctions or administrative sanctions bysupervisory agencies, etc. Furthermore, even when administrative guidance, recommendation on administrative sanctions oradministrative sanctions are issued by supervisory agencies, etc. to other investment corporations or other asset managementcompanies, the market price of investment units may be adversely affected through the spread of such adverse effect to thereal estate investment trust securities market.

iii. SANKEI REAL ESTATE's assets under management: risks specific to real estate that underlie assets(e)
Risks caused by the inclusion of hotels in investment target
a. Risks related to hotel operation conducted by lessee of hotel, etc.
In general, the lease term in lease agreements of hotels ranges from a relatively short term to a long term of 10 years
or more, and rents vary from fixed rent to those linked to the sales of operators. In addition to these contract terms,
seasonal factors, economic factors, institutional factors, social factors, etc., may affect the rental revenue of realestate used as hotel and the value of the hotel itself, which is an asset under management. Rental revenue will
become dependent on the operating revenue of hotels and will be significantly impacted by the stability of rent
payments and hotel operating revenue from assets under management especially when variable rents are adopted(Notes 1, 2, 3, 4).
Although most of the hotels held by SANKEI REAL ESTATE in Japan are for business use, they are operated by also
taking in accommodation demand of foreign tourists visiting Japan. Therefore, they may be affected not only by thetrend of business customers but also by the social circumstances of foreign countries, the economic situation, change
in the preference of tourists, epidemic of infectious diseases, etc. and exchange rates. At present, cancellations ofreservations at hotels held by SANKEI REAL ESTATE have been made due to the spread of the novel coronavirus,
adverse effects of the measures and responses in accordance with the declaration of state of emergency based on
the Act on Special Measures for Pandemic Influenza and New Infectious Diseases Preparedness and Response on
economic activities associated with such spread and the effects of the postponement of the Tokyo Olympic Games,
and it is difficult to predict the extent and period of such effects in the future at this point in time.
(Note 1) The hotel business is dependent primarily on the sales of accommodation facilities, and voluntary and temporary contracts withirregular customers account for the majority of such sales. Therefore, it is not easy to forecast hotel revenue accurately, andsuch revenue may fluctuate significantly. In particular, as for hotel revenue, there is a relatively high possibility that the pastrevenue status and future revenue status will differ due to the factors mentioned above. Furthermore, the revenue of SANKEIREAL ESTATE and the value of real estate under management may be adversely affected to a significant extent due to thefollowing factors specific to hotel business.
First, since the hotel business is generally a labor-intensive and capital-intensive business, the burden on fixed costs is large andthe threshold for breaking even is high. Therefore, it can be said that the risk of falling profits in the case of decrease in sales isrelatively high while improvement of profitability upon increase in sales is likely to be expected. In addition, competition among
tourist destinations, including overseas travel, and competition among hotels in the same region is fierce, and the hotel industry
is strongly affected by competition including competition with newly opened hotels. Also, the hotel industry is strongly affectedby general economic fluctuations such as the trend of economies and markets across the world and in each country and region
as well as by the trend of business customers and the trend of tourists which is also impacted by the situation of tourist facilities
and events in the surrounding area of the location. It may also be affected by changes in lifestyles including consumer propensity
and changes in the preference of consumers. In addition, if hotels, which are assets under management, have been registeredunder the Act on Development of Hotels for Inbound Tourists (Act No. 279 of 1949, as amended), the hotel owner will be granted
preferential tax treatment. However, if the registration is canceled or deleted, the preferential treatment will not be available,
which may adversely affect the revenue of SANKEI REAL ESTATE.
Country risks including unstable social circumstances such as war and terrorism, unforeseen natural disasters such as
earthquakes and storms, SARS (severe acute respiratory syndrome) and MERS (Middle East respiratory syndrome), epidemic ofinfectious diseases and plagues in and outside Japan such as the novel coronavirus which was confirmed in China at the end of2019 and is currently spreading around the world, including in Japan, and measures such as restrictions on movement and travel
by each country due to such epidemic as well as external factors such as transportation issues including strikes by airline
companies, airport facilities and railway companies, rise in transportation fares and unseasonable weather may adversely affectthe hotel industry for a long period.
(Note 2) As for hotels, revenue fluctuate depending on the season such as whether there are nearby events (conferences, etc.) and thesummer and winter holiday season. Revenue of hotels located in tourist spots is generally high during tourism and vacationseasons such as summer vacation and the year-end and New Year holidays. Due to such seasonal factors, the revenue for each
operating period including the revenue of SANKEI REAL ESTATE may fluctuate significantly.
(Note 3) As for hotels, regular replacement investments in not only buildings and auxiliary equipment classified as fixed assets but also
depreciable assets such as furniture, fixture and equipment (FF&E), decorations, and kitchen equipment is essential to maintainthe competitiveness of hotels. In addition, hotels have grades and images, and reasonable capital expenditure may be required
to maintain them. If the operation and maintenance costs of facilities and the burden of replacement investments are too large
compared to hotel sales, etc., the revenue of SANKEI REAL ESTATE may be adversely affected, and there is a possibility that
replacement investments in facilities will not result in increase in sales or revenue of hotels and the expected effects will not begained. In addition, even if the lessee of the hotel and the hotel operation support company bear the operation and maintenancecosts and the replacement investment, the value of the hotel may be adversely affected if the facility maintenance and operation
costs necessary for maintaining the grade, etc. are not borne by the lessee of the hotel and the hotel operation support company.
(Note 4) As for hotels with facilities that can attract a large number of customers in the neighborhood, the hotel's ability to attract
customers often depends largely on the facility’s ability to attract customers. There is a possibility that the decrease in theoperating revenue of hotels due to the relocation, closure and suspension of operation of such facilities or the decline in theability to attract customers will result in decrease in the variable rent portion or the decrease in property value, and may affect
SANKEI REAL ESTATE.

-7-

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020(w)

Risks related to revenue and expenditure
The revenue of SANKEI REAL ESTATE depends mainly on the rental revenue of the real estate acquired by SANKEI REALESTATE. Rental revenue of real estate may decrease due to various factors (Note). As of now, SANKEI REAL ESTATE has
received requests for rent reduction and extension on rent payment from some tenants due to the novel coronavirus,
but if there is no choice but to respond to such requests attributable to the novel coronavirus or in the case of
departure of tenants, there is a possibility that rental revenue of real estate will decrease.
On the other hand, the main operating expenses of SANKEI REAL ESTATE consist of fixed expenses such as depreciation,
fixed asset tax and city planning tax, and if rental revenue decreases, it may adversely affect the revenue of SANKEIREAL ESTATE.
In addition, the return of leasehold and guarantee deposits to tenants who move out, large amount of capital
expenditures, expenses required to acquire real estate, and expenditure for other real estate may increase dependingon the situation.
Furthermore, if the lessee reserves the right of cancellation under the lease agreement, the lease agreement may beterminated even during the contract period. In addition, there is no guarantee that the contract will be renewed
whenever the contract period expires. In these cases, the occupancy rate may decline, and rental revenue of realestate may decrease. In the lease agreement, forfeiture of leasehold and guarantee deposits with respect to therenewal fees upon the renewal of lease agreements and penalties in the event of cancellation by the lessee during
the contract period may be stipulated but such provisions may be entirely or partially invalid depending on thesituation and may result in an unexpected decrease in the revenue of SANKEI REAL ESTATE.
(Note)

Rental revenue of real estate may decrease significantly due to the decline in the occupancy rate of real estate, etc., and is also
susceptible to the market environment. In addition, rent may decrease as a result of the decrease due to consultation with thelessee and requests from the lessee. Furthermore, if the financial condition of the lessee deteriorates, rent payment based on
the lease agreement may be delayed, and the total amount of obligations such as delinquent rent, restoration costs, and otherdamages may exceed the range of leasehold and guarantee deposits. In particular, if infectious diseases such as the novel
coronavirus occur at real estate held by SANKEI REAL ESTATE or in the surrounding area of such real estate, or if the said realestate may be forced to close or suspend operation due to government policies and measures accompanying the spread of theinfection, Rent decrease may be requested by the lessee and rent payments may be delayed as a result of the decrease in sales
and deterioration of financial condition of the lessee due to the spread of the infectious disease and the prolonged epidemic,.
Also, there is a possibility that the decline in occupancy rate due to the departure of tenants will emerge. Except when excluded
by a statement in the fixed-term lease agreement, tenants may exercise the right to claim rent decrease based on the Act on
Land and Building Leases if the rent is unreasonably high. Therefore, there is no guarantee that rent levels will be maintainedin the future, and the rental revenue of real estate may decrease as a result of the rent decrease due to rent revisions orrequest for rent decrease.

-8-

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020

2. Financial Statements(1) Balance Sheet(Unit: thousand yen)
1st fiscal period(as of Aug. 31, 2019)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
LandConstruction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets-9-

2nd fiscal period(as of February 29, 2020)

1,998,469
1,432,427
326,641
38,009633,870426
4,429,846

3,778,564
3,099,144
64,006
41,198369,256
342,0737,694,243

147,558(2,657)
144,901353(4)349
2,445,779
2,130
7,735,371(121,060)
7,614,310
15,658(216)
15,442
345
(3)
341
800
(50)
749
33,982,039
23,76944,229,814

159,569(5,519)154,050353(8)345
2,457,766
220
13,599,039(333,525)
13,265,513
22,236(514)
21,721
2,608
(77)
2,530
2,336
(224)
2,112
52,510,871
68,415,132

8,593
8,593

7,653
7,653

40,38621
10,00050,40844,288,816
48,718,662

59,87816
10,00069,894
68,492,680
76,186,924

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020

(Unit: thousand yen)
1st fiscal period(as of Aug. 31, 2019)
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received intrust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets*1- 10 -

2nd fiscal period(as of February 29, 2020)

360,805
4,913,736
177,848
16,187
1,347
176,601
200,3435,846,869

144,640
4,756,000
160,972
24,874946
341,424
951,0036,379,861

17,400,000
90,922

29,200,000
91,8801,920,760

2,905,497

19,411,683
25,258,553

32,197,378
38,577,239

23,124,900

36,540,901

335,209

1,068,783

335,20923,460,109
23,460,109
48,718,662

1,068,783
37,609,684
37,609,684
76,186,924*1

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(2) Statement of Income(Unit: thousand yen)
1st fiscal period
From: Nov. 19, 2018
To:
Aug. 31, 2019
Operating revenue
Leasing business revenue
Other leasing business revenue
Total operating revenue
Operating expenses
Expenses related to leasing business
Asset management fee
Asset custody fee
Administrative service fees
Remuneration for directors (and other officers)
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Investment unit issuance expenses
Organization expenses
Other
Total non-operating expenses
Ordinary profit
Net profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net profit
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

2nd fiscal period
From: Sept. 1, 2019To:
Feb. 29, 2020

1,079,443
77,6381,157,082

*1

*1

*1

- 11 -

315,059
105,532
1,297
9,470
6,000
19,995457,355
699,727*1*1*11,796,513
136,736
1,933,249
577,268
139,263
1,420
7,320
3,600
38,333
767,204
1,166,045

14
14

30
778
808

35,827
159,201
99,59358,157
10,424363,204
336,537
336,537
1,349
(21)
1,327
335,209335,209

56,03926,581
12,502－2,000
97,123
1,069,729
1,069,729
950
4
955
1,068,774
8
1,068,783

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(3) Statement of Unitholders’ Equity
1st fiscal period (from November 19, 2018 to August 31, 2019)(Unit: thousand yen)
Unitholders’ equity
Surplus
Unappropriatedretainedearnings(undisposed loss)

Unitholders’capitalBalance at beginning of period-

Total surplus-

Total net assets

Total unitholders’equity---23,124,900

23,124,900

Changes in items during period
Issuance of new investment
units

23,124,900

Net profit
Total changes in items during
periodBalance at end of period*1335,209335,209335,209335,209

23,124,900

335,209335,20923,460,109

23,460,109

23,124,900

335,209335,20923,460,109

23,460,109

2nd fiscal period (from September 1, 2019 to February 29, 2020)(Unit: thousand yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning of period

23,124,900

Unappropriatedretainedearnings(undisposed loss)
335,209

Total surplus

335,209

Total unitholders’equityTotal net assets

23,460,109

23,460,109

13,416,001

13,416,001

Changes in items during period
Issuance of new investment
units

13,416,001

Dividend of surplus(335,200)(335,200)(335,200)(335,200)

Net profit

1,068,774

1,068,774

1,068,774

1,068,774

13,416,001

733,573733,573

14,149,574

14,149,574

36,540,901

1,068,783

1,068,783

37,609,684

37,609,684

Total changes in items during
periodBalance at end of period*1- 12 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(4) Statement of Cash Distribution(Unit: yen)
1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019

2nd fiscal period
From: Sept. 1, 2019To:
Feb. 29, 2020

I. Unappropriated retained earnings

335,209,333

1,068,783,044

II. Amount of distribution

335,200,400

1,068,616,000(1,399)（2,995）Retained earnings carried forward

8,933

167,044

Method of calculation of amount of
distribution

In accordance with the policy on
distribution of cash provided in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amount of
distribution shall be in excess of theamount equivalent to 90% of the amountof SANKEI REAL ESTATE’s earnings
available for distribution provided in
Article 67-15 of the Act on Special
Measures Concerning Taxation, but nomore than the amount of earnings. Basedon such policy, the decision was made to
distribute 335,200,400 yen, which is thelargest integral multiple of the total
number of investment units issued andoutstanding (239,600 units) in an amountnot in excess of unappropriated retained
earnings, as distribution of earnings.
The distribution of cash in excess ofearnings provided in Article 36, Paragraph
2 of SANKEI REAL ESTATE’s articles ofincorporation will not be made.

In accordance with the policy on
distribution of cash provided in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amount of
distribution shall be in excess of theamount equivalent to 90% of the amountof SANKEI REAL ESTATE’s earnings
available for distribution provided in
Article 67-15 of the Act on Special
Measures Concerning Taxation, but nomore than the amount of earnings. Basedon such policy, the decision was made to
distribute 1,068,616,000 yen, which is thelargest integral multiple of the total
number of investment units issued andoutstanding (356,800 units) in an amountnot in excess of unappropriated retained
earnings, as distribution of earnings.
The distribution of cash in excess ofearnings provided in Article 36, Paragraph
2 of SANKEI REAL ESTATE’s articles ofincorporation will not be made.

[Amount of distribution per unit]- 13 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(5) Statement of Cash Flows(Unit: thousand yen)
1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019
Cash flows from operating activities
Net profit before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from leasehold and guarantee deposits
received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits
received in trust
Refund of leasehold and guarantee deposits received
in trust
Payments of leasehold and guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Proceeds from issuance of investment units
Distribution paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 14 -

2nd fiscal period
From: Sept. 1, 2019To:
Feb. 29, 2020

336,537
124,798
99,593(14)
35,827(326,641)

1,069,729
216,818
12,502(30)
56,039264,097(633,870)

264,614(38,009)126,768
159,533
176,601
200,343(40,386)(426)
220,65414(19,639)(2)
201,026(3,188)(244,671)(17,959)
164,823
750,659(19,491)(341,646)
2,172,297
30(47,352)(1,351)2,123,623(2,574,113)(41,527,340)(22,088)(24,360,331)

90,944

1,017

(21)

(217)

1,927,822

1,012,067(7,062)(18,904)(10,000)(9,400)(42,109,171)(23,388,457)

6,010,169(1,096,433)
17,400,000
23,025,306
45,339,042
3,430,897*1
3,430,897

1,056,000(1,213,736)
11,800,000
13,403,498(334,117)
24,711,645
3,446,811
3,430,897*1
6,877,708

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(6) Notes on the Going Concern Assumption
Not applicable.
(7) Notes on Matters Concerning Significant Accounting Policies
1. Method of depreciation of non(1) Property, plant and equipment (including trust assets)
current assets
The straight-line method is adopted. Furthermore, the useful life of core property,
plant and equipment is as follows:
Buildings
2–65 years
Structures
6–59 years
Machinery and equipment
10 years
Tools, furniture and fixtures
4–6 years(2) Intangible assets
The straight-line method is adopted.
(3) Long-term prepaid expenses
The straight-line method is adopted.
2. Accounting for deferred assets
Investment unit issuance expenses
The entire amount is expensed as incurred.
3. Standards for revenue andAccounting for fixed asset tax, etc.
expense recognition
For fixed asset tax, city planning tax, depreciable asset tax, etc. on real estate or trust
beneficiary rights that have real estate as trust assets held, the method adopted isthat, of the tax amount assessed and determined, the amount corresponding to theconcerned accounting period is expensed as expenses related to leasing business.
Furthermore, the amount equivalent to fixed asset tax, etc. in the initial fiscal year
borne by SANKEI REAL ESTATE upon acquisition of real estate or trust beneficiary rightsthat have real estate as trust assets is not recognized as expenses but included in thecost of acquisition of the concerned real estate, etc. The amount equivalent to fixed
asset tax included in the cost of acquisition of real estate, etc. was 244,360 thousand
yen in the previous fiscal period and 85,263 thousand yen in the fiscal period underreview.
4. Scope of funds in the statement
The funds (cash and cash equivalents) in the statement of cash flows comprise cashof cash flows
on hand and cash in trust, demand deposits and deposits in trust, and short-term
investments with a maturity of 3 months or less from the date of acquisition that arereadily convertible to cash and that are subject to an insignificant risk of changes invalue.
5. Other significant matters serving (1) Accounting for trust beneficiary rights that have real estate, etc. as trust assets
as the basis for preparation ofConcerning trust beneficiary rights that have real estate, etc. as trust assets held, all
the financial statements
accounts of assets and liabilities within trust assets and all accounts of revenue andexpenses from the trust assets are recognized in the relevant account item of thebalance sheet and the statement of income.
Furthermore, the following material items of the trust assets recognized in therelevant account item are separately listed on the balance sheet.
i. Cash and deposits in trustii. Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools,
furniture and fixtures in trust; Land in trustiii. Leasehold and guarantee deposits received in trust(2) Accounting for consumption tax, etc.
The accounting for consumption tax and local consumption tax is by the method of
exclusion of the taxes.
[Notes on accounting standards, etc. yet to be applied]・ “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29 issued
on March 30, 2018)
・ “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on March
30, 2018)
1. Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in the
United States have jointly developed comprehensive accounting standards for revenue recognition and issued“Revenue from Contracts with Customers” (IFRS 15 by IASB and Topic 606 by FASB) in May 2014. Given the situation
where IFRS 15 will be applied from fiscal years beginning on or after January 1, 2018, and that Topic 606 will be applied
from fiscal years beginning after December 15, 2017, the ASBJ has developed comprehensive accounting standards
for revenue recognition and issued them together with the Implementation Guidance.
The basic policy for the ASBJ when it developed the accounting standards for revenue recognition was to determine
the accounting standards, incorporating the basic principles of IFRS 15 as a starting point, from the perspective ofcomparability between financial statements, which is one of the benefits of consistency with IFRS 15. If there is an
item to which consideration should be given, such as practices that have been conducted thus far in Japan, alternative
treatments will be added to the extent to which comparability is not impaired.
- 15 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
2. Scheduled application date
The above standards will be applicable from the beginning of the fiscal year ending February 2022.
3. Impact of applying the accounting standards, etc.
The impact on the financial statements of the applying of the “Accounting Standard for Revenue Recognition” andthe like is currently under review.
(8) Notes to the Financial Statements[Notes to the Balance Sheet]*1. Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations(Unit: thousand yen)
1st fiscal period(as of Aug. 31, 2019)

2nd fiscal period(as of Feb. 29, 2020)

50,00050,000[Notes to the Statement of Income]*1. Breakdown of operating income (loss) from real estate leasing(Unit: thousand yen)
1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019
A. Operating revenue from real estateleasing
Leasing business revenue
Rental revenue
Common area maintenance revenue

2nd fiscal period
From: Sept. 1, 2019To:
Feb. 29, 2020

978,011

Total leasing business revenue
Other leasing business revenue
Utilities reimbursement
Parking revenue
Other rental revenue
Total other leasing business revenue
Total operating revenue from real estateleasing
B. Operating expenses from real estateleasing
Expenses related to leasing businessOutsourcing expenses
Utilities expenses

101,432

1,643,859
152,654

1,079,443

1,796,513

53,21918,724

102,512

5,695

29,180
5,043

77,638

136,736

1,157,082

1,933,249

98,045

167,350
126,50968,504
1,355

Land rent
Repair expenses

10,663
2,844

Insurance premium
Trust fee
Depreciation
Other expenses related to leasing
business
Total expenses related to leasing
business
Total operating expenses from realestate leasing
C. Operating income (loss) from real estateleasing [A−B]- 16 -

1,814
46,426
4,551
2,788

1,846
123,992

215,878

7,807

11,948315,059

577,268

315,059

577,268

842,023

1,355,981

SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
[Notes to the Statement of Unitholders’ Equity]*1. Total number of investment units authorized and total number of investment units issued and outstanding
1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019
Total number of investment units
authorized
Total number of investment units issued
and outstanding(Unit: units)
2nd fiscal period
From: Sept. 1, 2019
To: Feb. 29, 2020

10,000,000

10,000,000

239,600

356,800[Notes to the Statement of Cash Flows]*1. Reconciliation of cash and cash equivalents at end of period to the amount of balance sheet items
1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019

(Unit: thousand yen)
2nd fiscal period
From: Sept. 1, 2019
To: Feb. 29, 2020

Cash and deposits
Cash and deposits in trust

1,998,469
1,432,427

3,778,564

Cash and cash equivalents

3,430,897

6,877,708

3,099,144[Notes on Lease Transactions]Operating lease transactions (as lessor)
Future minimum lease payments(Unit: thousand yen)
2nd fiscal period(as of Feb. 29, 2020)

Due within 1 year

1st fiscal period(as of Aug. 31, 2019)
1,713,466

Due after 1 year

10,658,891

2,108,261
14,429,883

Total

12,372,357

16,538,145[Notes on Financial Instruments]
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
SANKEI REAL ESTATE shall procure funds in a well-balanced manner through borrowing from financial institutions,issuance of investment corporation bonds, issuance of new investment units, etc. to contribute to steady growth ofassets under management as well as efficient operation and stability of management.
Upon borrowing from financial institutions, issuance of investment corporation bonds, etc., the fund procurement shallbe in a manner that gives due consideration to the balance between agility in fund procurement and financial stability,
characteristics of to-be-acquired real estate, etc. Specifically, the procurement means, ratio of long-term debt, ratio of
fixed-rate debt, staggering of maturities, provision of collateral or not, etc. shall be considered. If borrowing, lenders
shall be limited to the qualified institutional investors provided in the Financial Instruments and Exchange Act (however,limited to the institutional investors provided in Article 67-15 of the Act on Special Measures Concerning Taxation).
Issuance of new investment units shall be for the purpose of expansion of the scale of assets under management andenhancement of profitability, and implementation decided by taking into account the LTV ratio, dilution of existing
unitholders’ rights and accompanying decline in transaction price of investment units, etc. and in light of the financial
environment.
Derivative transactions may be conducted for the purpose of hedging the risk of fluctuation in interest rates and otherrisks on SANKEI REAL ESTATE arising from the concerned liabilities. No derivative transactions were conducted in thefiscal period under review.
(2) Description of financial instruments and associated risks, and risk management system
Borrowings are mainly for the purpose of procuring funds for acquisition of assets and funds for repayment of
obligations. Borrowings are exposed to the risk of inability to refinance upon becoming due for repayment, risk of risein the interest rate payable, etc., but the risks are mitigated by considering fund procurement that is well balanced
through issuance of investment units, etc. while also diversifying fund procurement sources and staggering maturities.
In addition, the risk of rise in interest rates on SANKEI REAL ESTATE’s operations is managed by closely watching interest
rate trends and keeping the LTV ratio under control in an appropriate manner.
(3) Supplementary explanation to matters concerning fair value, etc. of financial instruments
The fair value of financial instruments is values based on market price but may otherwise include values based onreasonable calculation when no market price is available. Certain assumptions, etc. are adopted in the calculation of theconcerned values. Accordingly, the concerned values may vary when different assumptions, etc. are adopted.
- 17 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
2. Matters concerning fair value, etc. of financial instruments
The following are the carrying amount and fair value as of August 31, 2019, and the amount of difference between these.
Financial instruments for which estimation of fair value is recognized to be extremely difficult are not included in the following
table (Note 2).
(Unit: thousand yen)
Carrying amount

Fair value

Amount of difference(1) Cash and deposits(2) Cash and deposits in trust
Total assets

1,998,469
1,432,427
3,430,897

1,998,469
1,432,427
3,430,897-(1) Short-term borrowings(2) Long-term borrowings

4,913,736
17,400,000

4,913,736
17,436,222

36,222

22,313,736

22,349,958

36,222

Total liabilities

The following are the carrying amount and fair value as of February 29, 2020, and the amount of difference between these.
Financial instruments for which estimation of fair value is recognized to be extremely difficult are not included in the following
table (Note 2).
(Unit: thousand yen)
Carrying amount(1) Cash and deposits(2) Cash and deposits in trust
Total assets(1) Short-term borrowings(2) Long-term borrowings
Total liabilities

Fair value

Amount of difference

3,778,564
3,099,144

3,778,564
3,099,144-

6,877,708

6,877,708-

4,756,000
29,200,000

4,756,000
29,251,894

51,89433,956,000

34,007,894

51,894(Note 1) Method of calculation of the fair value of financial instruments
Assets(1) Cash and deposits; (2) Cash and deposits in trust
Because these are settled in a short period of time, the fair value is approximately the same as the book value and thus stated at that bookvalue.
Liabilities(1) Short-term borrowings
Because these are settled in a short period of time and have floating interest rates, the fair value is approximately the same as the book value
and thus stated at that book value.
(2) Long-term borrowings
Of long-term borrowings, because those with floating interest rates reflect market interest rates in a short period of time, the fair value isthought to resemble the book value and thus stated at that book value. However, in the case of long-term borrowings with fixed interest rates,
the fair value is calculated based on the present value of their future cash flows discounted over the time to maturity and at the rate adjusted
for credit risks.
(Note 2)Financial instruments for which estimation of fair value is recognized to be extremely difficult(Unit: thousand yen)
2nd fiscal period(as of Feb. 29, 2020)

1st fiscal period(as of Aug. 31, 2019)
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust

90,922

91,8801,920,760

2,905,497* “Leasehold and guarantee deposits received” and “Leasehold and guarantee deposits received in trust” are not subject to disclosure of fair value,
because there being no market price and, even if the lease contract period has been set, there being the possibility of contract cancellation before
expiration, contract extension or contract renewal make calculating the actual deposit period impossible and reasonable projection of future cash
flows is thus recognized to be extremely difficult.
(Note 3)

Amount of redemption of monetary claims scheduled to be due after the end of the fiscal period (August 31, 2019)(Unit: thousand yen)

Category

Due within
1 yearDue after
1 to 2 years

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years

Due after
5 years

Cash and deposits

1,998,469

-

-

-

-

-

Cash and deposits in trust

1,432,427

-

-

-

-

-

3,430,897

-

-

-

-

-

Total

- 18 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
Amount of redemption of monetary claims scheduled to be due after the end of the fiscal period (February 29, 2020)(Unit: thousand yen)

Category

Due within
1 yearDue after
1 to 2 years

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years

Due after
5 years

Cash and deposits

3,778,564

-

-

-

-

-

Cash and deposits in trust

3,099,144

-

-

-

-

-

6,877,708

-

-

-

-

-

Total
(Note 4)

Amount of repayment of borrowings scheduled to be due after the end of the fiscal period (August 31, 2019)(Unit: thousand yen)
Due within
1 yearDue after
1 to 2 years

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years

Due after
5 years

Short-term borrowings

4,913,736

-

-

-

-

-

Long-term borrowings-

4,800,000

5,600,000

3,700,000

3,300,000

-

Total

4,913,736

4,800,000

5,600,000

3,700,000

3,300,000-

Amount of repayment of borrowings scheduled to be due after the end of the fiscal period (February 29, 2020)(Unit: thousand yen)
Due within
1 yearDue after
1 to 2 years

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years

Due after
5 years

Short-term borrowings

4,756,000

-

-

-

-

-

Long-term borrowings-

4,800,000

11,500,000

9,600,000

3,300,000

-

Total

4,756,000

4,800,000

11,500,000

9,600,000

3,300,000-[Notes on Securities]
1st fiscal period (as of August 31, 2019)
Not applicable.
2nd fiscal period (as of February 29, 2020)
Not applicable.
[Notes on Derivative Transactions]
1st fiscal period (as of August 31, 2019)
Not applicable.
2nd fiscal period (as of February 29, 2020)
Not applicable.
[Notes on Retirement Benefits]
1st fiscal period (as of August 31, 2019)
Not applicable.
2nd fiscal period (as of February 29, 2020)
Not applicable.

- 19 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
[Notes on Tax-Effect Accounting]
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities(Unit: thousand yen)
2nd fiscal period(as of Feb. 29, 2020)

1st fiscal period(as of Aug. 31, 2019)
Deferred tax assets
Non-deductible accrued enterprise tax

21

16

Total

21

16

21

16

Deferred tax assets, net
2.

Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate after application of tax-effect accounting(Unit: %)1st fiscal period
2nd fiscal period(as of Aug. 31, 2019)(as of Feb. 29, 2020)

Statutory tax rate

31.51

31.51

[Adjustments]
Deductible distribution payable(31.38)(31.48)

Other

0.26

0.06

Effective income tax rate after applicationof tax-effect accounting

0.39

0.09

[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method]
1st fiscal period (from November 19, 2018 to August 31, 2019)
Not applicable.
2nd fiscal period (from September 1, 2019 to February 29, 2020)
Not applicable.
[Notes on Related-Party Transactions]
1. Parent company, major corporate unitholder, etc.
1st fiscal period (from November 19, 2018 to August 31, 2019)
Percentage of Description of relationship
Share capital or
voting rights,
Transaction
Balance at
Description of
investments in
etc. held by (in) Concurrent
Description of amount Account end of period
Locationbusiness orcapitalSANKEI REAL holding oftransaction (thousand
item(thousandBusiness
occupation
positions,(thousand yen)
ESTATEyen)
yen)
relationshipetc. by(%)
directors
Receipt ofinvestments
The Sankei
100.00% held inin capital
Parent Building Co., Chiyoda-ku,
Real estate
Parent28,120,463
SANKEI REAL
(incorporation 100,000
companyLtd.
Tokyobusinesscompany
ESTATEthrough(Note 3)
privateplacement)
Name ofcompany, etc.
Attributeor name of
person(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption
tax, etc. Amounts are rounded down to the nearest thousand yen.
(Note 3) The Sankei Building Co., Ltd. fell under the category of parent company with 100.00% voting rights held in SANKEI REAL ESTATE at the timeof the receipt of investments in capital, but an issuance of new investment units through public offering resulted in the voting rights
becoming 4.74% and thus no longer falls under the category of parent company as of the last day of the fiscal period. Accordingly, percentage
of voting rights, etc. held in SANKEI REAL ESTATE and transaction amount are the percentage and amount for the period when it was aparent company.

2nd fiscal period (from September 1, 2019 to February 29, 2020)
Not applicable.
2. Affiliated company, etc.
1st fiscal period (from November 19, 2018 to August 31, 2019)
Not applicable.
2nd fiscal period (from September 1, 2019 to February 29, 2020)
Not applicable.

- 20 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
3. Fellow subsidiary, etc.
1st fiscal period (from November 19, 2018 to August 31, 2019)
Name ofcompany, etc.
Attributeor name of
personLocation

Sankei
Subsidiary Building Asset
Chiyoda-ku,
of parent ManagementTokyo
companyCo., Ltd.
(Note 3)

Share capital orinvestments incapital(thousand yen)

Description ofbusiness or
occupation

100,000

Investment
managementbusiness

Percentage of Description of relationshipvoting rights,
Transaction
Balance at
etc. held by (in) Concurrent
Description of amount Account end of period
SANKEI REAL holding oftransaction (thousand
item(thousandBusiness
positions,
ESTATEyen)
yen)
relationshipetc. by(%)
directors-

Concurrent Outsourcing
holding ofof asset
Payment of
positions by management organizer fee
1 director
services

50,000(Note 4)--(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption
tax, etc. Amounts are rounded down to the nearest thousand yen.
(Note 3) As stated in “(Note 3)” of “1. Parent company, major corporate unitholder, etc.,” The Sankei Building Co., Ltd. no longer falls under the
category of parent company of SANKEI REAL ESTATE. Consequently, Sankei Building Asset Management Co., Ltd., too, no longer falls under
the category of fellow subsidiary, etc. Accordingly, the transaction amount for organizer fee is the amount for the period when it was a
fellow subsidiary, etc.
(Note 4) The amount of organizer fee is based on the terms and conditions provided in SANKEI REAL ESTATE’s articles of incorporation.

2nd fiscal period (from September 1, 2019 to February 29, 2020)
Not applicable.
4. Director, major individual unitholder, etc.
1st fiscal period (from November 19, 2018 to August 31, 2019)
Name ofcompany, etc.
Attributeor name of
personDirector

Yuichi Ota

Location

Share capital orinvestments incapital(thousand yen)--

Percentage of Description of relationshipvoting rights,
Transaction
Balance at
etc. held by Concurrent
Description of amount Account end of period(in) SANKEI holding oftransaction (thousand
item(thousandBusiness
REAL ESTATE positions, relationship
yen)
yen)
etc. by(%)
directors
Payment oforganizer fee
50,000Executive Director of(Note 3)
SANKEI REAL ESTATE,
Executive Director ofand President and
SANKEI REAL ESTATE, and Payment ofChief Executive
President and Chief
asset
Officer of Sankei
Executive Officer of Sankei management
Accounts
539,489
Building Asset
Building Asset Management fee to asset
payable 113,975(Note 4)
Management Co.,
Co., Ltd.
management
other
Ltd.
company(Note 3)
Description ofbusiness or
occupation(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption
tax, etc. Amounts are rounded down to the nearest thousand yen.
(Note 3) Payment of organizer fee and asset management fee is for transactions conducted by Yuichi Ota as representative of Sankei Building AssetManagement Co., Ltd., and transaction amount is based on the terms and conditions provided in SANKEI REAL ESTATE’s articles ofincorporation.
(Note 4) Asset management fee includes the portion of the fee for property acquisition included in the book value of individual real estate, etc.
(433,957 thousand yen).
(Note 5) Transaction terms and conditions are decided based on the actual market conditions.

2nd fiscal period (from September 1, 2019 to February 29, 2020)
Name ofcompany, etc.
Attributeor name of
personDirector

Yuichi Ota

Location-

Share capital orinvestments incapital(thousand yen)

Description ofbusiness or
occupation-

Executive Director of
SANKEI REALESTATE, andPresident and Chief
Executive Officer ofSankei Building
Asset Management
Co., Ltd.

Percentage
Description of relationshipof votingrights, etc. Concurrent
held by (in) holding ofBusiness
SANKEI REAL positions,relationship
ESTATE
etc. by(%)
directors-

Descriptionoftransaction

Payment of
Executive Director of
asset
SANKEI REAL ESTATE, andmanagement
President and Chief
fee to asset
Executive Officer of Sankei
management
Building Asset ManagementcompanyCo., Ltd.
(Note 3)

Transaction
Balance atamount Account end of period(thousanditem(thousand
yen)
yen)

378,563(Note 4)

Operatingaccounts
payable139,263(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption
tax, etc. Amounts are rounded down to the nearest thousand yen.
(Note 3) Payment of asset management fee is for transactions conducted by Yuichi Ota as representative of Sankei Building Asset Management Co.,
Ltd., and transaction amount is based on the terms and conditions provided in SANKEI REAL ESTATE’s articles of incorporation.
(Note 4) Asset management fee includes the portion of the fee for property acquisition included in the book value of individual real estate, etc.
(239,300 thousand yen).
(Note 5) Transaction terms and conditions are decided based on the actual market conditions.

- 21 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
[Notes on Asset Retirement Obligations]
1st fiscal period (from November 19, 2018 to August 31, 2019)
Not applicable.
2nd fiscal period (from September 1, 2019 to February 29, 2020)
Not applicable.
[Notes on Investment and Rental Properties]
SANKEI REAL ESTATE owns office buildings, etc. for the purpose of earning revenue from leasing. The carrying amount,amount of change during period and fair value of these investment and rental properties are as follows:(Unit: thousand yen)
1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019
Carrying amount
Balance at beginning of period

2nd fiscal period
From: Sept. 1, 2019
To: Feb. 29, 2020-

44,203,915

Amount of change during period

44,203,915

24,210,996

Balance at end of period

44,203,915

68,414,911

47,000,000

72,605,000

Fair value at end of period(Note 1) Carrying amount is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Of the amount of change during period, the amount of increase in the previous fiscal period is mainly attributable to new property acquisitionof 8 properties (44,327,907 thousand yen), etc., while the amount of decrease is mainly attributable to depreciation (123,992 thousand yen).
The amount of increase in the fiscal period under review is mainly attributable to new property acquisition of 4 properties (24,345,357
thousand yen), etc., while the amount of decrease is mainly attributable to depreciation (215,878 thousand yen).
(Note 3) Fair value at end of period is the appraisal value by an external real estate appraiser.

Furthermore, the income (loss) concerning investment and rental properties is presented in “Notes to the Statement of
Income.”[Notes on Segment Information, Etc.]
1. Segment information
The information is omitted, because SANKEI REAL ESTATE has a single segment—the real estate leasing business.
2. Related information
1st fiscal period (from November 19, 2018 to August 31, 2019)(1) Information by product and service
The information is omitted, because operating revenue to external customers for a single group of products and services
exceeds 90% of operating revenue on the statement of income.
(2) Information by geographic area
i. Operating revenue
The information is omitted, because operating revenue to external customers in Japan exceeds 90% of operating
revenue on the statement of income.
ii. Property, plant and equipment
The information is omitted, because the amount of property, plant and equipment located in Japan exceeds 90%of the amount of property, plant and equipment on the balance sheet.
(3) Information by major customer
Name of customer
GRANVISTA Hotels & Resorts Co., Ltd.

Operating revenue
194,716(Unit: thousand yen)
Related segment
Real estate leasing business

2nd fiscal period (from September 1, 2019 to February 29, 2020)(1) Information by product and service
The information is omitted, because operating revenue to external customers for a single group of products and services
exceeds 90% of operating revenue on the statement of income.
(2) Information by geographic area
i. Operating revenue
The information is omitted, because operating revenue to external customers in Japan exceeds 90% of operating
revenue on the statement of income.
ii. Property, plant and equipment
The information is omitted, because the amount of property, plant and equipment located in Japan exceeds 90%of the amount of property, plant and equipment on the balance sheet.
- 22 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020(3) Information by major customer
Name of customer
GRANVISTA Hotels & Resorts Co., Ltd.
Sony Corporation(Note)(Unit: thousand yen)
Related segment

Operating revenue
324,435

Real estate leasing businessNot disclosed (Note)

Real estate leasing businessNot disclosed due to unavoidable reasons as consent for disclosure has not been obtained from the lessee.

[Notes on Per Unit Information]
1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019

2nd fiscal period
From: Sept. 1, 2019
To: Feb. 29, 2020

Net assets per unit

97,913 yen

105,408 yen

Earnings per unit

2,312 yen

3,007 yen

(Note 1) Earnings per unit is calculated by dividing net profit by the period’s daily weighted average number of investment units (Fiscal period ended
August 2019: 144,970 units, Fiscal period ended February 2020: 355,420 units). In addition, diluted earnings per unit is not stated, because
there are no diluted investment units(Note 2) The basis for calculation of earnings per unit is as follows:
1st fiscal period
2nd fiscal period
From: Nov. 19, 2018
From: Sept. 1, 2019
To: Aug. 31, 2019
To: Feb. 29, 2020
Net profit (thousand yen)335,209

1,068,774--

Net profit attributable to common investment units (thousandyen)

335,209

1,068,774

Average number of investment units during period (units)

144,970

355,420

Amount not available to common unitholders (thousand yen)

[Notes on Significant Subsequent Events]
Not applicable.
(9) Changes in Total Number of Investment Units Issued and Outstanding
Changes in unitholders’ capital and the total number of investment units issued and outstanding from the incorporation of
SANKEI REAL ESTATE to the last day of the fiscal period under review (February 29, 2020) are as follows:
Total number of investment
Unitholders’ capitalunits issued and outstanding
Remarks(thousand yen)(units)Date
Description
Increase
Increase
Balance
Balance(Decrease)(Decrease)
Incorporation
Nov. 19, 2018
through private
100,000
100,000
1,000
1,000(Note 1)placement
Capital increase
Mar. 11, 2019
through public
21,928,467
22,028,467
227,238
228,238(Note 2)
offering
Capital increase
Apr. 10, 2019
through third-party
1,096,433
23,124,900
11,362
239,600(Note 3)
allotment
Capital increase
Sept. 2, 2019
through public
12,777,138
35,902,038
111,619
351,219(Note 4)
offering
Capital increase
Sept. 26, 2019
through third-party
638,862
36,540,901
5,581
356,800(Note 5)allotment(Note 1) Investment units were issued at a paid-in amount of 100,000 yen per unit upon the incorporation of SANKEI REAL ESTATE.
(Note 2) New investment units were issued through public offering at an issue price of 100,000 yen (paid-in amount of 96,500 yen) per unit for the
purpose of procuring funds for acquisition of new properties.
(Note 3) New investment units were issued through third-party allotment accompanying the capital increase through public offering at a paid-in amountof 96,500 yen per unit.
(Note 4) New investment units were issued through public offering at an issue price of 118,734 yen (paid-in amount of 114,471 yen) per unit for the
purpose of procuring funds for acquisition of new properties.
(Note 5) New investment units were issued through third-party allotment accompanying the capital increase through public offering at a paid-in amountof 114,471 yen per unit.

- 23 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020

3. Reference Information(1) Information on Price of Assets under Management, Etc.
i. Investment Status
1st fiscal period(as of August 31, 2019)
Asset
group

Asset type

Geographic area
(Note 1)

Greater Tokyo, Osaka City andNagoya City
OfficeCities designated bybuildings
government ordinance(excluding above), core cities
and major regional cities
RealestateGreater Tokyo, Osaka City andNagoya City
Cities designated by
Sub assets
government ordinance(excluding above), core cities
and major regional cities
Greater Tokyo, Osaka City andNagoya City
OfficeCities designated bybuildings
government ordinance(excluding above), core cities
and major regional cities
Greater Tokyo, Osaka City andNagoya City
Real estate
Cities designated by
Sub assets
in trust
government ordinance(excluding above), core cities
and major regional cities
Greater Tokyo, Osaka City andNagoya City
Cities designated byHotelsgovernment ordinance(excluding above), core cities
and major regional cities
Subtotal
Deposits and other assets
Total assets

2nd fiscal period(as of February 29, 2020)

Total amountheld(million yen)
(Note 2)As apercentage of
total assets(%) (Note 3)

Total amountheld(million yen)
(Note 2)As apercentage of
total assets(%) (Note 3)

2,591

5.3

2,612

3.4

-

-

-

-

-

-

-

-

-

-

-

-

32,52766.8

52,718

69.2

-

-

-

-

9,085

18.6

9,058

11.9

-

-

4,026

5.3

9,085

18.6

9,058

11.9

-

-

4,026

5.3

44,203
4,514
48,718

90.7
9.3
100.0

68,414
7,772
76,186

89.8
10.2
100.0

(Note 1) “Greater Tokyo” refers to Tokyo, Kanagawa Prefecture, Saitama Prefecture and Chiba Prefecture.
“Core cities” refers to cities with population of 200,000 or more (excluding Greater Tokyo, Osaka City and Nagoya City, and other cities
designated by government ordinance).
“Major regional cities” refers to cities that are municipalities with population of less than 200,000 and the Asset Management Company has
deemed certain demand can be found for specific asset types.
(Note 2) “Total amount held” is based on the carrying amount (in the case of real estate and real estate in trust, the depreciated book value), rounded
down to the nearest million yen. Furthermore, the total amount held for real estate in trust with hotel as the asset type includes the bookvalue of movables incidental to hotels.
(Note 3) “As a percentage of total assets” is rounded to one decimal place.

1st fiscal period(as of August 31, 2019)

2nd fiscal period(as of Feb. 29, 2020)

Total liabilities

25,258As a percentage of total
assets(%) (Note 2)
51.8

Total net assets
Total assets

23,46048,71848.2
100.0

Amount(million yen) (Note 1)

38,577

As a percentage of total
assets(%) (Note 2)
50.6

37,60949.4

76,186

100.0

Amount(million yen) (Note 1)(Note 1) Total liabilities, total net assets and total assets amounts are each based on the carrying amount, rounded down to the nearest million yen.
(Note 2) “As a percentage of total assets” is rounded to one decimal place.

- 24 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
ii.

Investment Assets
The following are the assets held by SANKEI REAL ESTATE (real estate or trust beneficiary rights that have real estate astrust assets; hereinafter, may be collectively referred to as the “portfolio assets”) as of February 29, 2020.

(A) Portfolio List
The property name, location, acquisition price, investment ratio, book value, appraisal value and acquisition date of theportfolio assets of SANKEI REAL ESTATE are as follows:

Asset
type

Property
number

Property namePrice(million yen)

Investment
ratio
(%)
3.7

Book value(million yen)
(Note 2)

Appraisal value(million yen)
(Note 3)Acquisition
date(Note 4)

Tokyo Sankei
Building(Note 5)

Chiyoda-ku,
Tokyo

2,509

A-2

BREEZÉ TOWER(Note 5)Kita-ku,
Osaka-shi,
Osakai. 8,600
ii. 4,500
Total
13,10019.5

13,217

14,715

6,698

9.9

6,761

7,440 Mar. 12, 2019

2,055

3.1

2,074

2,220 Mar. 12, 2019

5,829

8.7

6,040

6,530 Mar. 12, 2019

4,959

7.4

5,036

5,570 Mar. 12, 2019

3,782

5.6

3,897

3,940 Mar. 12, 2019

10,04014.9

10,182

10,600

Sept. 3, 2019

5,400

8.0

5,508

5,620

Sept. 3, 2019

54,37480.8

55,33059,325

-

8,961

13.3

9,058

9,140 Mar. 12, 2019

3,990

5.9

4,026

4,140

Sept. 3, 2019

A-4
A-5
A-6
A-7
A-8
A-9

S-GATENIHONBASHIChuo-ku,
HONCHOTokyo(Note 5)S-GATE
Chiyoda-ku,
AKIHABARATokyo
Hibiya Sankei
Chiyoda-ku,
Building
Tokyo
Hatchobori
Chuo-ku,
Sankei Building
Tokyo
Toyo Park
Koto-ku,
Building
Tokyo
ShinagawaShinagawa-ku,
Seaside TS Tower
Tokyo(Note 5)
Omori Park
Ota-ku,Building
Tokyo

SubtotalSub
assetsLocation

A-1

A-3
Officebuildings

Acquisition price(Note 1)

B-1

Hotel Intergate
Tokyo Kyobashi

B-2

Hotel Intergate
Hiroshima

Chuo-ku,Tokyo
Naka-ku,
Hiroshima-shi,
Hiroshima

2,612

2,690 Mar. 12, 2019
i. Mar. 12,
2019
ii. Sept. 3,
2019

Subtotal-

12,951

19.2

13,084

13,280

-

Total

-

67,325100.0

68,41472,605-(Note 1) “Acquisition price” is the sale and purchase price of real estate and each trust beneficiary right stated in each sale and purchase agreement for the
portfolio assets, rounded down to the nearest million yen. The sale and purchase prices do not include consumption tax, local consumption tax and thevarious expenses required for the acquisition. “Investment ratio” is the proportion of the acquisition price of each portfolio asset to the sum total
amount of acquisition prices, rounded to one decimal place.
(Note 2) “Book value” is the depreciated book value for each portfolio asset as of February 29, 2020, rounded down to the nearest million yen.
(Note 3) “Appraisal value” is the appraisal value with an appraisal date of February 29, 2020, stated in each real estate appraisal report. The appraisal of eachportfolio asset is entrusted to Japan Real Estate Institute, The Tanizawa Sōgō Appraisal Co., Ltd. and Daiwa Real Estate Appraisal Co., Ltd.
(Note 4) “Acquisition date” is the acquisition date stated in each sale and purchase agreement for the portfolio assets.
(Note 5) The acquisition price, book value and appraisal value are the figures equivalent to the co-ownership interest (2% for “Tokyo Sankei Building” and 51%
for “S-GATE NIHONBASHI-HONCHO”) and the quasi co-ownership interest (45% for “BREEZÉ TOWER” and 25% for “Shinagawa Seaside TS Tower”) heldby SANKEI REAL ESTATE.

- 25 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(B) Overview of Buildings and Leasing
The property name, construction completion, total rental revenue, security and guarantee deposits, total leasable area,
total leased area and occupancy rate of the portfolio assets of SANKEI REAL ESTATE are as follows:
Security andTotal rental
Total leasable
Total leased Occupancy
Construction
guarantee
Asset Property
revenue
area
area
rate
Property namecompletion
deposits
type
number(million yen)
(m2)
(m2)
(%)
(Note 1)(million yen)
(Note 2)
(Note 4)(Note 5)(Note 6)(Note 3)
Tokyo Sankei
A-1
Building
Sept. 28, 2000
100
91
881.69881.69100.0(Note 7)BREEZÉ TOWER
A-2
July 1, 2008
879
809
12,146.02
12,146.02
100.0(Note 7)
S-GATENIHONBASHIA-3
Oct. 31, 2018307
307
3,171.83
3,171.83
100.0
HONCHO(Note 7)
S-GATE
A-4
Sept. 29, 2017
111
111
1,681.55
1,681.55
100.0
AKIHABARA
OfficeHibiya Sankei
buildings
A-5
June 25, 1992
388
324
3,439.61
3,439.61
100.0
Building
Hatchobori
A-6
Sept. 1, 1965
310
255
5,594.90
5,594.90
100.0
Sankei Building
Toyo Park
A-7
June 18, 1991
205
168
4,224.52
4,224.52
100.0
Building
ShinagawaSeaside TS
Not disclosed Not disclosed Not disclosed Not disclosed
A-8
July 25, 2003
100.0
Tower
(Note 8)(Note 8)(Note 8)(Note 8)(Note 7)
Omori Park
A-9
May 31, 1993
292
268
7,469.72
7,469.72
100.0
Building
Not disclosed Not disclosed Not disclosed Not disclosed
Subtotal (average)
100.0(Note 8)(Note 8)(Note 8)(Note 8)
B-1

Hotel Intergate
Tokyo Kyobashi

Jan. 18, 2018

413

206

6,006.53

6,006.53

100.0

B-2

Hotel Intergate
Hiroshima

Oct. 31, 2018

237

118

9,160.15

9,160.15

100.0

Subtotal (average)

-

651

325

15,166.68

15,166.68

100.0

Total (average)-

Not disclosed(Note 8)Not disclosed(Note 8)Not disclosed(Note 8)Not disclosed(Note 8)

100.0

Sub
assets(Note 1) “Construction completion” is the date of new construction completion stated in the registry of the main building for each portfolio asset. If there are
multiple main buildings, the date of the oldest building stated in the registry is indicated. As for "Shinagawa Seaside TS Tower," the date of new
construction completion stated in the registry of the building with the building number 100-1-9 is indicated.
(Note 2) “Total rental revenue” is the amount calculated by annualizing the monthly rent (Only the rent for the rental accommodation, excluding usage fees forwarehouses, signboards, parking lots, etc., but including common service charges. Free rent and rent holiday (*1) will not be taken into consideration.
As for rents that include floating rents in agreements with the tenants, the rents are calculated without taking floating rents into consideration.
Consumption tax, etc. are not included. The same shall apply hereinafter.) for the building stated in the lease agreement for each portfolio asset effective
as of February 29, 2020, rounded down to the nearest million yen. The amount calculated by annualizing the monthly rent stated in the lease agreement
concluded with the end tenant with respect to the portion in the pass-through-type master lease agreement (*2) is indicated when a pass-through-type
master lease agreement has been concluded for the portfolio assets.
(*1) “Free rent” refers to measures temporarily reducing rent or other amount for mainly tenants newly moving in that temporarily reduce costs
associated with moving so as to encourage them to move in. “Rent holiday” refers to an agreement on measures temporarily reducing rent orother amount on a regular or irregular basis for a certain period of time during a tenant’s period of occupancy. The same shall apply hereinafter.
Unless otherwise stated, calculations are made without taking free rent or rent holiday into consideration when calculating monthly rent, etc. inthis document.
(*2) “Pass-through-type master lease agreement” refers to master lease agreements that have no rent guarantee.
(Note 3) “Security and guarantee deposits” is the total amount of security and guarantee deposits (including the amount expected to be received based on eachlease agreement, but excluding security and guarantee deposits for warehouses, signboards, parking lots, etc.) based on the lease agreement for eachportfolio asset as of February 29, 2020, rounded down to the nearest million yen. The amount of security deposits stated in the lease agreement
concluded with the end tenant with respect to the portion in the pass-through-type master lease agreement is indicated when a pass-through-type
master lease agreement has been concluded for the portfolio assets.
(Note 4) “Total leasable area” is the area (excluding area of warehouse, signboard, parking lot, etc.) expected to be leasable based on the lease agreement,
drawing, etc. of the buildings for each portfolio asset as of February 29, 2020, rounded down to two decimal places.

- 26 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(Note 5) “Total leased area” is the total leased area (excluding area of warehouse, signboard, parking lot, etc.) stated in the lease agreement (excluding leased
agreements under which the lease period is yet to commence) for each portfolio asset as of February 29, 2020, rounded down to two decimal places.
With respect to the portion which comes under the pass-through-type master lease agreement, the total area for which the lease agreement has
actually been concluded with the end tenant and for which the lease period has commenced is indicated, rounded down to two decimal places.
(Note 6) “Occupancy rate” is the ratio of total leased area to total leasable area for each portfolio asset as of February 29, 2020, rounded to one decimal place.
In addition, each subtotal and portfolio total figure is the ratio of the sum total of total leased area to the sum total of total leasable area for eachportfolio asset, rounded to one decimal place.
(Note 7) The security and guarantee deposits, total leasable area and total leased area are the figures equivalent to the co-ownership interest (2% for “Tokyo
Sankei Building” and 51% for “S-GATE NIHONBASHI-HONCHO”) and the quasi co-ownership interest (45% for “BREEZÉ TOWER” and 25% for “Shinagawa
Seaside TS Tower”) held by SANKEI REAL ESTATE.
(Note 8) Not disclosed, due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from thetenant, relevant party, etc. or information from which confidential information can be derived.

- 27 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(C) Overview of Real Estate Appraisal Reports
The following is an overview of each real estate appraisal report prepared by Japan Real Estate Institute, The Tanizawa Sōgō
Appraisal Co., Ltd. and Daiwa Real Estate Appraisal Co., Ltd. upon being entrusted by SANKEI REAL ESTATE and the AssetManagement Company with the appraisal of the portfolio assets of SANKEI REAL ESTATE. The concerned real estateappraisal reports are the appraising appraisal company’s judgment and opinion at a certain point in time, and are not aguarantee of the validity or accuracy of the content thereof, possibility of transaction at the concerned appraisal value, etc.
Furthermore, there is no special vested interest between Japan Real Estate Institute, The Tanizawa Sōgō Appraisal Co., Ltd.
or Daiwa Real Estate Appraisal Co., Ltd. and SANKEI REAL ESTATE or the Asset Management Company.
Overview of appraisal report

Asset
type

Property
number

A-1
A-2

A-3

A-4
Officebuildings

A-5
A-6
A-7
A-8
A-9

Property nameTokyo Sankei
Building(Note 2)BREEZÉ TOWER(Note 2)S-GATENIHONBASHIHONCHO(Note 2)S-GATEAKIHABARA
Hibiya Sankei
Building

Appraiser

Appraisalvalue(millionyen)(Note 1)

Direct capitalization
DCF method
methodIndicatedvalue by
Indicated
Indicated
cost
value byvalue byDiscount Terminal
approachincome Cap rate income
rate
cap rate(million
approach(%)
approach
(%)
(%)
yen)
(million(millionyen)
yen)Japan Real
Estate Institute

2,690

2,720

2.5

2,650

2.2

2.6

2,750

Japan Real
Estate Institute14,71514,805

3.8

14,5803.4

4.0

15,300Japan Real
Estate Institute

7,440

7,560

3.3

7,310

3.0

3.5

6,750

2,220

2,260

3.5

2,180

3.3

3.7

2,070

6,530

6,670

3.0

6,390

2.8

3.2

7,030

5,570

5,660

4.1

5,530

4.2

4.3

5,550

3,940

4,010

4.0

3,870

3.8

4.2

2,990

10,60010,825

3.6

10,5003.7

3.8

10,225

5,620

5,720

3.8

5,520

3.6

4.0

5,560

59,32560,230-58,530--58,225

Japan Real
Estate InstituteJapan Real
Estate Institute
The Tanizawa
Hatchobori
Sōgō Appraisal
Sankei Building
Co., Ltd.
Toyo Park
Japan Real
Building
Estate InstituteShinagawa
The Tanizawa
Seaside TS Tower Sōgō Appraisal(Note 2)
Co., Ltd.
Omori Park
Japan Real
Building
Estate InstituteSubtotal

B-1

Hotel Intergate
Tokyo Kyobashi

Daiwa Real
EstateAppraisal Co.,
Ltd.

9,140

9,270

3.7

9,090

3.5

3.9

9,460

B-2

Hotel Intergate
Hiroshima

Japan Real
Estate Institute

4,140

4,180

4.5

4,100

4.3

4.7

4,420

Subtotal

13,28013,450-13,190--13,880Total

72,60573,680-71,720--72,105Sub
assets(Note 1) “Appraisal value” is the appraisal value with an appraisal date of February 29, 2020, stated in each real estate appraisal report.
(Note 2) The appraisal value, indicated value by income approach based on direct capitalization method, indicated value by income approach based on DCF
method and indicated value by cost approach are the figures equivalent to the co-ownership interest (2% for “Tokyo Sankei Building” and 51% for “SGATE NIHONBASHI-HONCHO”) and the quasi co-ownership interest (45% for “BREEZÉ TOWER” and 25% for “Shinagawa Seaside TS Tower”) held by
SANKEI REAL ESTATE.

- 28 -SANKEI REAL ESTATE Inc. (2972) Financial Report for the Fiscal Period Ended February 2020
(2) Capital Expendituresi. Schedule of Capital Expenditures
Of capital expenditures associated with renovation work, etc. currently planned for assets held by SANKEI REAL ESTATE asof February 29, 2020, the following are the major estimated amounts (10 million yen or more). The estimated construction
costs below include the portion separately charged to expenses in accounting.
Expected construction cost (million yen)
Name of real estate, etc.
(Location)
BREEZÉ TOWER(Kita-ku, Osaka-shi, Osaka)
BREEZÉ TOWER(Kita-ku, Osaka-shi, Osaka)ii.

Scheduled period

Renewal of electric window
shade for officeInstallment of LED lighting in
one office floor

From: Mar. 1, 2020
To:
Mar. 31, 2020
From: July 1, 2020
To:
July 31, 2020

Total
amountAmount of
Total amountpayment
already paid
during period

22

-

-

22

-

-

Capital Expenditures during the Fiscal Period
Major construction works falling under the category of capital expenditures of 10 million yen or more conducted in thefiscal period under review for assets held by SANKEI REAL ESTATE as of February 29, 2020 are as follows: For the fiscal
period under review, capital expenditures amounted to 69 million yen and repair expenses separately charged to expenses
amounted to 46 million yen for a combined total of 116 million yen of construction work implemented.

Name of real estate, etc.
(Location)
Hatchobori Sankei Building(Chuo-ku, Tokyo)

iii.

Purpose

Purpose

PeriodMaintenance of outside air
treatment air conditioner
and renewal of pressurizedwater pump
Other
Total

From: Nov. 1, 2019To:
Nov. 26, 2019

Amount of payment(million yen)
18
51
69

Cash Reserves for Long-Term Repair Plans
Based on long-term repair plans formulated on a property-by-property basis, SANKEI REAL ESTATE makes the following
provision of reserve for repairs from cash flows during the fiscal period for the purpose of allocating to medium- to longterm future large-scale repairs and other funds.
Fiscal period

Balance of reserve at
beginning of period(thousand yen)
Provision of reserve during
period (thousand yen)
Reversal of reserve during
period (thousand yen)
Reserve carried forward(thousand yen)

1st fiscal period
From: Nov. 19, 2018
To: Aug. 31, 2019

2nd fiscal period
From: Sept. 1, 2019To:
Feb. 29, 2020-

95,103

95,103

105,897-

70,534

95,103

130,466- 29 -